Thank you, Geof.

I'm delighted to be with all of you this morning to discuss our shared interests and the shared challenges before us.

Last Tuesday, during President Trump's State of the Union address, the President expressed hope that "we will govern not as two parties but as one nation." My agenda at HUD, like the President said, "is not a Republican agenda or a Democrat agenda. It's the agenda of the American people."

Fair and affordable housing is a practical issue, not a partisan one. It is a human dignity, not a heated dispute. And it is fundamentally local.

At HUD, we are working to enable localities and regions to tackle their housing challenges. Our driving mission and guiding principles seek to strengthen local autonomy, opportunity and prosperity. And together, working with various local governments, including many of you in this room, HUD is making great strides to help communities. But there is much more we can do. We still have challenges in the areas of housing affordability.

A Shared Philosophy of Local and Regional Empowerment

The issue of affordable housing is not solely a federal problem-it's everybody's problem. It's a problem that deserves a neighborly solution. And it's going to take all levels of government working together to solve it.

I believe we need to heed our Founding Fathers' commitment to a limited Federal government, so that limitations on the self-sufficiency of local leaders are mindfully removed.

President Reagan once said: "Man is not free unless government is limited. There's a clear cause and effect that is as neat and predictable as a law of physics: As government expands, liberty contracts."

The wisdom in that famous quip is its appreciation for federal government being at its best not when it dictates from above, but rather when it liberates from below.

What this means for HUD is that our mission of promoting fair and affordable housing is best achieved when regional and local governments are free to be the best versions of themselves.

For this reason, HUD recognizes that regional councils play a critical role in the coordination, planning and delivery of current and future federal programs. By channeling a region's many local voices and inter-jurisdictional differences into a powerful public consensus, regional councils act as a vital organ that helps local bodies plan for the future.

As a doctor, I'm quite familiar with another organ that helps bodies plan for the future - the human brain.

Prior to becoming HUD Secretary, my life's work as a pediatric neurosurgeon was to protect, treat and heal the human brain. The brain is not a monolith, but rather the spectacular sum of its highly localized, highly specialized parts.

Indeed, the brain itself runs on principles of regionalism. The complexities of future planning are not resolved by one region of the brain alone, but rather through constant communication, coordination, and conversations among many neighbors.

The brain practices good governance. Its frontal lobe - the executive region that plans complex cognitive behavior - does not interpret sight without seeking the visual signals of the occipital lobe, nor sound without the auditory inputs of the temporal lobe.

A similar philosophy prevails at HUD: Federal housing policy should always be formulated through an essential consultation with America's regional and local leaders.

You are our eyes and ears. We see you, we hear you, and our work to ensure fair and affordable housing begins by interpreting and amplifying the signals you faithfully send.

HUD Accomplishments in Promoting Regional Success

I'll turn now to the many ways HUD is promoting prosperity and regional success. Our efforts include spurring reinvestment in local communities; advancing economic opportunity; reducing homelessness among vulnerable populations; funding disaster recovery; and improving health in housing.

In spurring local community reinvestment, HUD has preserved affordable housing options by converting more than 100,000 public housing units through the Rental Assistance Demonstration program, which has generated close to $6 billion dollars in construction investment.

In advancing economic opportunity, the Federal Housing Administration at HUD has served more than 650,000 homebuyers in 2018 alone, most of whom were low-to-moderate income earners. FHA has also supported the production and preservation of more than 120,000 multifamily housing units, and provided $2.45 billion dollars in insurance for hospitals and residential care facilities.

We have expanded our Moving To Work demonstration program from 39 to 139 public housing authorities across the country. This expansion provides more housing authorities the opportunity to design and test innovative strategies based on the unique characteristics of their communities, which can better help residents find employment, become more self-sufficient and increase housing choices for low-income families.

We have also awarded nearly $75 million dollars to public housing authorities through the HUD Family Self-Sufficiency program to help public housing residents increase their earned income, save for the future and reduce their dependency on government assistance.

In reducing homelessness, the HUD Veterans Affairs Supportive Housing program has helped cut veteran homelessness for more than 2,100 people in 2018, reducing the total number of homeless veterans by 5.4 percent last year and to nearly half the number reported in 2010.

In a further victory, the HUD-supported Continuums of Care - or CoCs - reduced the number of families with children experiencing homelessness by 2.7 percent since 2017 - that's more than 1,500 households - and 29 percent - or more than 23,000 households - since 2010.

In 2018, HUD awarded more than $2 billion dollars in CoC program grants, $270 million dollars in Emergency Solutions Grants, and $43 million dollars in funding for Youth Homelessness Demonstration Program grants to local communities working to end homelessness.

CoCs, as many of you are probably aware, are often made up of a number of jurisdictions coming together to work on a regional basis to end homelessness. Many regional councils are also CoCs, and I want to thank you for your work. Together, I believe that we can end homelessness and ensure that, if homelessness does occur, it is a rare, brief, and one-time experience.

In improvements to health in housing, we recently awarded $141 million dollars to 48 state and local government agencies for the remediation of lead-based paint, mold and other health hazards in the home. HUD's efforts to promote healthy homes is deeply personal for me.

There are few moments more distressing as a surgeon than to, help grant a child a second lease on life, only then to watch that child leave your care and return to a home filled with health hazards.

My work now is to ensure the Federal government's health efforts reach the doors of high-risk American families at the prevention stage-long before their children are exposed to dangerous chemicals for which they might later need a cure.

Last December, the Trump Administration unveiled a Federal Action Plan to reduce childhood lead exposure. The plan will accomplish better health outcome goals through comprehensive collaboration among federal agencies and with a range of stakeholders, including states, tribes and local communities, along with parents, businesses and property owners.

In funding disaster recovery, HUD awarded nearly $28 billion dollars last April to regions impacted by natural disasters. These funds were provided through the HUD Community Development Block Grant Disaster Recovery Program - or CDBG-DR - and addressed seriously damaged housing, businesses and infrastructure from major disasters that have occurred over the past four years. These grants represent the largest single amount of disaster recovery assistance in HUD's history.

In total, HUD has allocated more than $35 billion dollars in CDBG-DR funding last year to 16 state and local governments, helping America's hardest hit regions on their long road to recovery.

We also introduced new FHA financing options, including the "Disaster Standalone Partial Claim," for disaster victims who are rebuilding or buying another home following a disaster. This option covers up to 12 months of missed mortgage payments with an interest-free second loan on the home.

Affordable Housing

Getting help with a mortgage in the wake of disaster is important, but if you can't afford a home, mortgage forbearance isn't very useful to you. This brings me to a major challenge facing many of our cities and citizens today-the inadequate supply of affordable housing.

HUD's strategy to increase housing affordability is to increase housing supply. It's economics 101-a scarce product is an expensive product, so more supply means less cost.

But if the free market is guided by an invisible hand, archaic state and local regulatory barriers - such as outdated zoning and land use restrictions - are its invisible handcuffs.

According to the National Association of Home Builders, more than 25% of the cost of a home is the direct result of federal, state and local regulations. Further, a large majority of land parcels in big cities are only eligible for detached single-family homes. Increasing density - without changing the core characteristics of a community - could house more people and, in the process, moderate prices -- which are rising to inaccessibly high levels across the country.

We can solve this issue but it requires all levels of government working together, and further collaboration with the private sector to share ideas on how to apply new technologies and evidence-based best practices. And it requires us to examine where existing rules and regulations are driving up the cost of housing and multifamily development.

HUD is doing its part to address the affordable housing shortage by increasing the supply of affordable multifamily housing through a multitude of initiatives.

We have completed review of regulations and made recommendations to reduce regulatory burdens for manufactured housing production.

The average new manufactured home is only $70,600. In several of our largest cities, you can pay nearly that for a parking space. Due to the price tag alone, manufactured housing is a big part of the solution to providing unsubsidized, quality, affordable housing.

We have also created a Department-wide "Landlord Task Force" to reduce burdensome administrative requirements and encourage more landlords to participate in the HUD Housing Choice Voucher program.

We've begun efforts in conjunction with the Department of Justice to reduce the dampening effects of the False Claims Act on home loan originators.

And, significantly, we continue to work toward amending the Affirmatively Furthering Fair Housing Rule, or AFFH, so that it works for local communities, not against them.

For example, last year, we withdrew the problematic Assessment of Fair Housing Tool for local governments. The tool was confusing, difficult to use, contained errors, and frequently produced unacceptable assessments, in addition to requiring unsustainable levels of technical assistance from HUD. Jurisdictions that failed this flawed assessment stood to lose critical funding that supported their communities' most vulnerable families.

We reopened HUD's AFFH rule for public comment because the existing rule discourages reinvestment and the building of affordable housing in distressed communities. Practicing fair housing isn't a choice, it's the law, but the existing regulations were too heavy-handed and Washington-centric. Local community leaders know more about their own communities than Washington. Impositions that limit local autonomy must be narrowly tailored, and they must fundamentally serve to empower, not punish, the American people who live there.

I urge the local leaders here today to take a closer look at your books for policies and practices that limit new mixed-income multifamily developments in your region. To be successful, we need partners like you to encourage the communities you live in to identify, share and implement best practices for others to amplify and follow.

Opportunity Zones

Next, I'll briefly explain how HUD is working to spur reinvestment in communities through the little known albeit encouraging idea of Opportunity Zones. Opportunity Zones are a tremendous tax incentive, created by the 2017 Tax Cuts and Jobs Act, designed to stimulate economic development and job creation by incentivizing long-term investments in low-income communities.

During his inaugural address, President Trump declared that "the forgotten men and women of our country will be forgotten no longer." It is critical that every American share in the gains of the past two years.

There are nearly 9,000 distressed areas across the country that have been designated as Opportunity Zones, and they are home to approximately 35 million Americans. The Department of Treasury estimates that Opportunity Zone enterprises may attract more than $100 billion dollars in private investment. This much-needed medicine is what any good doctor would prescribe to heal communities where nearly one in three people live in poverty and unemployment is nearly twice the national average.

Too often, new investments in distressed communities are "here today, gone tomorrow." By offering incentives that encourage investors to think in terms of decades instead of days, Opportunity Zones ensure that development is "here today, here to stay."

At the local level, this long-term approach means that new growth becomes consistent growth and new jobs become steady jobs.

Last year, the President established the White House Opportunity and Revitalization Council through an Executive Order, which I am very proud to chair. The council consists of members across 13 agencies, whose mission is to jump-start development in urban and rural communities. The Revitalization Council will work to prioritize Opportunity Zones in a variety of federal efforts, including grant funding, loan guarantees, infrastructure spending and crime prevention.

I encourage the leaders of regional councils to take advantage of the tremendous benefits offered to those who invest in Opportunity Zones. For example, one might consider the role of Opportunity Zones in the context of regional growth plans and how one might align those plans with the value unlocked by the Opportunity Zone incentive. Regional planners may now be better equipped to attract private investments into their local communities by aligning transportation projects, urban development areas, city centers, employment hubs, and other land use plans within Opportunity Zones that maximize returns for both the region as a whole and its most vulnerable residents.

Our credo: "Everyone does best when you invest in the distressed."

Conclusion

I want to close today with this: All of us share a common community as residents of our great national neighborhood - the United States of America. While the powerful work of the regional and local leaders here today is essential to individual Americans' prosperity and success, we must never forget the "United" in United States of America.

I share in the awe and admiration President Trump expressed last week for the vast breadth and rich diversity of America's regional communities, which hail "from the rocky shores of Maine and the volcanic peaks of Hawaii, from the snowy woods of Wisconsin and the red deserts of Arizona, from the green farms of Kentucky and the golden beaches of California".

We are one nation, under God, and indivisible. I look forward to working with you all in the year ahead as partners in promoting the local prosperity unleashed when limited government is pursued with unlimited commitment to securing fair and affordable housing to all who call America home.

Thank you, and God bless.

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